The 62-year-old former Germany midfielder has been sacked after 33 games in charge of South Korea. A run of poor results has put World Cup 2018 qualification under threat.
Stielike, who took charge in September 2014, oversaw the country's first defeat to Qatar in 32 years last week, and was widely expected to be sacked after a run of poor performances.
South Korea have qualified for eight successive tournaments, co-hosting the 2002 World Cup and making impressive strides on the international front. But three defeats from their last five games leaves qualification hanging in the balance.
The Red Devils, second with a one-point advantage, finish up with a home match against section leaders Iran on August 31 before a trip to Uzbekistan on September 5.
In World Cup qualifying, only two places are reserved for direct qualification. If South Korea finished in third place, they would need to win two play-offs to book a place in Russia next year.
"Since Stielike became the head coach in 2014, he worked hard to develop South Korea's football environment, educate football instructors, while posting a good result at the Asian Cup," Lee Yong Soo, KFA technical committee chief, was quoted as saying by the Yonhap news agency.
"But we thought he failed to deliver the results that we wanted in the final qualifying stage."
rd/tj (AFP, RTRE)